BioHarvest Sciences Inc. (NASDAQ: BHST) received a $1.6 million grant from the Israeli Innovation Authority (IIA) as part of its Bio‑Convergence program, a non‑dilutive, zero‑interest loan that will be repaid only from future revenues generated by the funded project. The grant is earmarked for accelerating the integration of artificial‑intelligence tools, expanding bioreactor capacity, and enhancing autonomous manufacturing functions for the company’s second‑generation Botanical Synthesis platform.
The grant comes at a time when BioHarvest’s balance sheet is already robust, with approximately $25 million in cash and a fully funded capital plan. In the third quarter of 2025, the company generated $9.1 million in revenue, a 39% year‑over‑year increase, and maintained a 61% gross‑profit margin. Although the company continues to report net losses, it is moving toward adjusted EBITDA breakeven, and the grant provides additional capital without diluting equity or increasing debt burden.
Segment analysis shows that direct‑to‑consumer nutraceutical revenue grew 30% in Q3 2025, while contract development and manufacturing services (CDMO) revenue surged 722%. The grant will support scaling of both segments, particularly the high‑growth CDMO business, by enabling larger‑scale bioreactor operations and more efficient AI‑driven process optimization.
CEO Ilan Sobel said the grant “validates our technology leadership and provides a strategic financial advantage that preserves capital while enabling rapid scale of our manufacturing capabilities.” He added that the funding will accelerate the evolution of the Botanical Synthesis platform and help the company reach adjusted EBITDA breakeven sooner.
Despite the positive news, the market reaction on the announcement day was muted; the stock fell 6.09% amid broader technical weakness and valuation concerns. The grant alone did not offset the prevailing market sentiment, indicating that investors are weighing the company’s ongoing profitability challenges alongside the financing benefit.
The grant positions BioHarvest to accelerate its second‑generation platform, improve unit economics, and capture a growing bioconvergence market. However, the company must continue to manage costs and achieve profitability to fully realize the long‑term benefits of the investment.
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